We uncover the smart buys at the cut price store and when you're better off
going to the supermarket.

I'll admit it, I love shopping in Poundland. I used it to buy my daughter's first baby food and every mother I know uses the store to pick up items for their children's party bags (where else can you buy nine packs of bubbles for £1?).

The key to getting a bargain is to know what everything costs. It is very disappointing to get home and find out that you could have bought the whole shopping basket more cheaply in Sainsbury's.

I was pleased to find this week that, on the whole, my instincts on what is worth buying were spot on. I bought Original Source shower gel, which would have been £3 in Tesco, as well as Aquafresh toothpaste, at a £1.20 discount from the Tesco price. I also saved on my shampoo and conditioner, and Organix baby biscuits.

If you are going to buy branded products anyway, Poundland is often cheaper than the supermarkets, but it would seldom beat them on own-label items. For example, one of its most popular deals is a pack of 200 Johnson & Johnson cotton buds, but you could pick up some supermarket own-branded equivalents for nearly half the price.

If you also take into account the supermarket economy brands, then Poundland generally does not come close.

Shoppers are divided on whether the batteries are worth it. Some reckon they don't last as long as the conventional ones, while others say they're a handy staple for the myriad soft toys, remote controls and other battery-operated items around the home. I also spotted a few items that were not very good value at all, such as a packet of Fridge Raiders chicken pieces, that would have been on a two for £1.50 deal at Ocado.

Another word of warning for any Poundland novices is never to buy fewer than the recommended quantity of items. If something says three for £1, two of the same item will cost £1 as well – so it always pays to buy them all.

Like other Poundland shoppers, I've particularly come to love the treasure hunt effect of the store: you never know what you might find. The trouble is, that tends to negate all of the savings you might make. I bought some microwave steamer bags, a pack of Tinkerbell stickers for my daughter, and some silicon baking trays. If you don't really need something, is it still a bargain?

If you haven't been to Poundland yet, you are fast becoming a member of a minority club. The chain, which already has 250 stores across Britain, is planning to open a store every week for the next year. Last week, it announced an 80pc increase in profits, thanks to customers buying everything from stuffed meerkats to bags of sugar.

The demise of Woolworths left a hole in our high streets and Poundland is filling it. The difference, of course, is that the company only has the one price for all of its products – everything costs a pound whether it is worth a pound or not. That means that for every fantastic bargain in the store, there tends to be something you could buy cheaper elsewhere. The trick to successful shopping is to understand ''Poundland Economics'' and pick the bargains while avoiding the overpriced items.

"Savvy shoppers can do really well at Poundland," said Malcolm Pinkerton, a senior retail analyst at consultancy Verdict. "But for some things the supermarkets can afford to be more aggressive and promote multibuy deals."

One secret of being a good Poundland shopper is to follow the crowds. The company is Britain's biggest seller of batteries, offering 12 Kodak AA batteries for a pound. It also sells batteries for watches. Other top choices include a 1.5kg (3lb 5oz) bag of granulated sugar, which is cheaper than any of the current supermarket offers, or 120g (4oz) of Maltesers – again a supermarket-beating price.

But watch out for some branded and unbranded food products, unbranded health and beauty items and medication – you can get many items cheaper elsewhere.

It's also important to watch out for the sizes of items. The company now has such purchasing power that manufacturers are producing specially sized items to be sold for a pound in its stores, which may not be comparable to the normal-sized products that you buy in the supermarket.

The company's reputation is changing fast. While its ''value'' proposition was once only seen as appropriate in less affluent areas, a store that recently opened in middle-class Twickenham is now the busiest in the street.

"The image has changed quite a bit," Mr Pinkerton said. "Lots of middle-class shoppers have realised they can get good value in Poundland so they can trade up elsewhere. People have discovered that they can get branded products. The company is still doing well, where other discounters have had their day in the sun, it has shaken off its poor image."

In Lewisham, south-east London, Poundland was the busiest shop in the shopping centre last Monday morning. Popular items included baby food, shampoo and shower gel, and good-value toothpaste (Poundland now has its own contracts with the major toothpaste manufacturers, allowing it to offer products really cheaply). Six packs of branded crisps were also a hit.

Shirley Coleman, from New Cross, was one shopper making a special trip to Lewisham because of Poundland's good prices. "I've been coming here ever since I started doing WeightWatchers," she said. "They sell lots of WeightWatchers bits and they are much cheaper than the supermarket."

Ms Coleman, like many other shoppers, uses Poundland to supplement her regular supermarket shop.

Patrick Lamb, who lives in Lewisham, uses Poundland to buy branded shaving gel and other equipment. "I've been coming here fairly frequently since Woolworths' demise," he said. "I also like the razors, remaindered books and DVDs."

If you feel that shopping at Poundland might be beneath you, remember that the one price fits all strategy has a noble history. In 1884, Michael Marks established a stall he called a Penny Bazaar, with a sign saying "Don't ask the price. It's a penny."

It seems highly appropriate that a new Pound Bazaar should have emerged to compete with the business that his stall morphed into – Marks & Spencer.